Two years since its introduction, the Consumer Duty Act remains a journey for the UK’s financial services industry. Despite its relative infancy, the regulation has taken root as a philosophy as much as a compliance obligation.

Challenges persist, but it’s clear that the hyperfocus on improving customer outcomes is transforming the way firms develop and design products for the better.

From UX design to regulatory reporting, there’s a tangible difference in how Consumer Duty is shaping practice. Broadgate’s consultants reflect on the impact two years on.

Conflicting Industry Sentiment

Designed to set higher and clearer standards of customer protection, the influence of Consumer Duty has expanded beyond this remit to affect the way firms engage with one another, from investment banks to asset managers.

This has prompted significant pushback from industry bodies and wholesale firms, bringing Consumer Duty into the spotlight of the Leeds Reforms, where the FCA has been tasked with reviewing its application to wholesale markets.

 While some see the risk of a blunt, one-size-fits-all approach, others argue that extending Duty principles could strengthen trust and accountability across the value chain.

 Whatever transpires, it’s clear the FCA welcomes feedback and industry dialogue, writing in its recent statement on the market reforms, ‘we will continue to engage industry, listen to feedback and pilot new ideas.’

Consumer Duty and the Deregulation Agenda

The recent deregulation drive coming from the UK government has some interesting implications for the Consumer Duty Act, especially since it forms the basis of the FCA’s primary objective (to protect consumers).

While ministers push to streamline regulation, the FCA has positioned Consumer Duty as a scaffold. The duty increasingly serves as the common standard against which other rules are measured.

In practice, this means the FCA can effectively retire outdated rules without compromising the principles-based framework. The shift presents a dual challenge. On the one hand, firms welcome greater accountability, but on the other, the absence of prescriptive checklists places more weight on judgment, evidence, and board-level accountability.

Public Opinion

New polling by YouGov shows a measurable uplift in public perception of banks two years into the Consumer Duty regime.

Since 2023, there has been a double-digit rise in the proportion of people who believe banks communicate clearly, protect customers from harm, and offer fair value – all outcomes the Consumer Duty Act was designed to realise.

In an industry that’s historically struggled with trust, this is a welcome sign of progress.

For firms, this signals that the effort invested in embedding Consumer Duty is not just regulatory compliance, but a chance to rebuild credibility with the public.

The Tech Influence

As consumer duty matures alongside increasingly powerful technologies, the ability to evidence outcomes relies on a firm’s ability to capture data. While tech is shaping up to be a foundation of compliance, the same tools represent significant novel risks: opaque systems and unclear decision logic.

It can be tempting to see regulation and innovation as being at odds. In reality, the conversations we’ve had with regulators tell a different story. The FCA has made it clear that it’s learning alongside firms, especially when it comes to AI.

Whether the model works or not is only a small piece of the puzzle. Risk teams must focus on how the model reaches its conclusions, what data it relies on, and whether its outputs align with the Consumer Duty’s standard of fairness.

Increasing Scrutiny

The FCA has been clear that scrutiny will continue to intensify, with boards expected to demonstrate that outcomes are actively shaping the decision-making process, as we saw in the first post-Consumer Duty board reports back in January.

While it’s unlikely that deregulation will roll back the core expectations of Consumer Duty, it might still affect how scrutiny is implemented.

This includes data as an enabler, process refinements, and tech that can evidence outcomes transparently. In this context, Consumer Duty acts as a culture of continuous improvement.

The challenge is to balance efficiency gains from deregulation with the FCA’s unwavering expectation: that customer outcomes remain front and centre.

Consumer Duty isn’t just a regulatory milestone; it’s reshaping how firms think about talent, culture, and outcomes.

At Broadgate, we work with leading organisations to connect visionary professionals and provide guidance that brings these expectations to life.

If you’re exploring what the Consumer Duty Act means for the future of your business, let us know what you need, and our consultants will get back to you as soon as possible: https://www.broadgatesearch.com/general-enquiries.